2003 (1) TMI 547 - AT - Customs

Confiscation of goods - Fine and penalty - Valuation - Misdeclaration of country of origin - Redemption fine and penalty - Importer - Fictitious importer

Summary

Issues Involved:
1. Mis-declaration of the description, weight, country of origin, and value of the imported goods.
2. Classification of the imported goods under the Customs Tariff.
3. Valuation of the imported goods for duty calculation.
4. Provisional assessment of the imported goods.
5. Liability for confiscation and penalties under the Customs Act, 1962.

Detailed Analysis:

1. Mis-declaration of the description, weight, country of origin, and value of the imported goods:
The Directorate General of Revenue Intelligence (DRI) investigated M/s. RN International and found discrepancies in the declared information. The imported fabrics were declared as originating from China, but physical examination revealed they were from Korea or Taiwan. The declared quantities and values were also found to be incorrect. The Commissioner concluded that the mis-declaration of weight and country of origin was intentional to evade customs duties. The goods were placed under seizure under the Customs Act, 1962, due to these mis-declarations.

2. Classification of the imported goods under the Customs Tariff:
The Commissioner classified the imported fabrics under Customs Tariff heading 6001.92, which was not contested by the appellant. The classification under 6001.92 attracted a duty rate of Rs. 100/- per kg. The Tribunal upheld this classification as there was no challenge to it in the appeal.

3. Valuation of the imported goods for duty calculation:
The declared transaction value of US $ 0.40/meter was rejected by the Commissioner, who instead adopted a value of US $ 1.00 per meter CIF based on contemporary invoices of similar goods imported at Mumbai port. However, the Tribunal found that the Commissioner's method of valuation was flawed as it did not account for the mixed-lot nature of the imported goods, which cannot be compared with prime-lot goods. The Tribunal did not uphold the revised valuation and found no incentive for the appellants to misdeclare values when duties were charged by weight.

4. Provisional assessment of the imported goods:
The assessments for Bills of Entry Nos. 622, 623, and 624 were provisional, as confirmed by the Commissioner. The Tribunal noted that the assessments were still under examination by the proper officers, and thus, the goods under Bills of Entry 623 and 624 could not be confiscated merely due to classification and quantity discrepancies. The Tribunal confirmed the classification and weights for these bills but did not uphold the confiscation and penalties. For Bill of Entry No. 622, the goods were cleared out of charge, and the Tribunal found misdeclaration of weight and excess unaccounted goods, leading to liability for confiscation under Section 111(m).

5. Liability for confiscation and penalties under the Customs Act, 1962:
The Commissioner ordered the confiscation of the goods under Section 111(l) and 111(m) of the Customs Act, 1962, and imposed a redemption fine and penalties. The Tribunal, however, set aside the confiscation, penalties, and redemption fine for all three bills of entry and remanded the matter for re-determination of fine and penalty for Bill of Entry No. 622. The Tribunal found no merit in the allegations regarding the fictitious nature of the importers and directed the clearance of goods under Bills of Entry 623 and 624 after assessment as per the Tribunal's orders.

Conclusion:
The appeal was disposed of with the Tribunal upholding the classification under heading 6001.92, confirming the provisional assessments, and setting aside the revised valuation, confiscation, penalties, and redemption fine. The matter was remanded for re-determination of fine and penalty for Bill of Entry No. 622, considering the margin of profit and other expenses. The goods under Bills of Entry 623 and 624 were to be cleared after assessment.